RealtyTrac: 'Foreclosure Floodwaters Have Receded'

RealtyTrac: 'Foreclosure Floodwaters Have Receded'

Foreclosure filings dropped 34 percent in August compared to levels from a year ago, driven mostly by a big drop in foreclosure starts, RealtyTrac reported this week.

Foreclosure starts in August were at the lowest level since December 2005 and were down 44 percent from a year ago. Thirty-eight states saw a decrease in foreclosure starts last month, including both nonjudicial and judicial states. In Colorado, foreclosure starts were down 80 percent alone, and foreclosure starts dropped 66 percent in Massachusetts and by 65 percent in Arizona.

"The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year," says Daren Blomquist, RealtyTrac’s vice president. "Meanwhile foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. This was the case with the jump in Nevada foreclosure starts in August."

Foreclosure starts rose month-over-month in 17 states, led by a 226 percent jump in Nevada. Foreclosure starts were also up 44 percent in Maryland and by 24 percent in California.

Bank repossessions in August increased 6 percent, but were still down 25 percent from a year ago, RealtyTrac reports.

An improving economy, greater job creation, and improved personal financial conditions are all leading to a decline in foreclosures, notes Walt Molony, spokesperson for the National Association of REALTORS®.